Should You Worry About China Tontine Wines Group Limited's (HKG:389) CEO Pay Cheque?




  • In Business
  • 2019-05-16 05:33:14Z
  • By Simply Wall St.
 

In 2008 Guangyuan Wang was appointed CEO of China Tontine Wines Group Limited (HKG:389). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

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See our latest analysis for China Tontine Wines Group

How Does Guangyuan Wang's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that China Tontine Wines Group Limited has a market cap of HK$266m, and is paying total annual CEO compensation of CN¥1.6m. (This number is for the twelve months until December 2017). Notably, the salary of CN¥1.6m is the vast majority of the CEO compensation. We took a group of companies with market capitalizations below CN¥1.4b, and calculated the median CEO total compensation to be CN¥1.3m.

So Guangyuan Wang receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

You can see a visual representation of the CEO compensation at China Tontine Wines Group, below.

Is China Tontine Wines Group Limited Growing?

China Tontine Wines Group Limited has increased its earnings per share (EPS) by an average of 6.7% a year, over the last three years (using a line of best fit). It achieved revenue growth of 9.7% over the last year.

I'm not particularly impressed by the revenue growth, but it is good to see modest EPS growth. Considering these factors I'd say performance has been pretty decent, though not amazing. Although we don't have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has China Tontine Wines Group Limited Been A Good Investment?

With a three year total loss of 53%, China Tontine Wines Group Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

Remuneration for Guangyuan Wang is close enough to the median pay for a CEO of a similar sized company .

The per share growth could be better, in our view. And shareholder returns have been disappointing over the last three years. So suffice it to say we don't think the compensation is modest. So you may want to check if insiders are buying China Tontine Wines Group shares with their own money (free access).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.

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